Yarn shortage: Pakistan loses $10 million deals for sportswear export

International buyers have backed out of their $10 million deals placed with Sialkot-based exporters for sportswear and diverted their orders to China, Cambodia and Vietnam. The buyers belong to Japan, US and some EU countries who refused to open L/Cs for their orders particularly of martial art kit as the exporters are unable to complete the orders because of severe shortage of yarn in the local market.
Former chairman of Pakistan Readymade Garments Manufacturers Association [Prgmea] Ijaz Khokhar told Business Recorder on Wednesday via phone from Sialkot that foreign buyers have backed out of the $10 million deals. "Pakistan as an exporting country is gradually becoming an unreliable supplier to the global markets because of several issues including electricity and high gas tariffs, law and order situation and now the yarn scarcity in the local market," he added.
He demanded of the government to restrict the yarn export for a short period until the local market regains its previous level in terms of the price of raw item. He said the local buyers normally float price quotations for one-year export orders and cannot change them at any stage the whole year.
Therefore, the recent yarn price hike and its shortage are forcing exporters bear unnecessary burden of huge financial loss while fulfilling their international commitments. Ijaz feared that the country's is textile garment export may fall by about 30 percent this fiscal year and maximum export could hardly be about $3 billion because of crises in the country.
The country is also likely to witness dismal revenue earning through export levies by 30 percent while the target of $25 billion for textile export is also becoming difficult to achieve by 2013. The fragile small and cottage industry is likely to fall prey to the yarn shortage, which will eventually lead to mass unemployment in the country.
Former chairman of Prgmea said Aptma intends to export 100 percent yarn this fiscal year and has already forecast further shortage for next fiscal year, which will cast a negative impact on value-added export. Citing Bangladesh for the recent export ban on jute, he said that the Pakistan government should also ban yarn export to protect the local market.
Ijaz said China seems quite serious with its huge buying of yarn to dominate the global value-added textile market alone in coming years, which will also reduce Pakistan's export of the similar products. Pakistan's normal annual export of value-added products stands $4 billion, while Sialkot's share is $300 million, he said. He also demanded of the Competition Commission of Pakistan to take note of the yarn shortage and its unrestricted export.